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Saturday, 14 March 2009

Bursa Malaysia To Launch Commodity Murabahah House By Mid-2009

KUALA LUMPUR, March 12 (Bernama) -- Bursa Malaysia Bhd plans to launch the Commodity Murabahah House (CMH), an international spot commodity platform which operates under Syariah requirements, by middle of this year.

"Currently, Islamic financial institutions are using commodities which are traded on the London Metal Exchange (LME). So, we are creating an alternative platform for Islamic banks," Bursa's chief executive officer Datuk Yusli Mohamed Yusoff said Thursday.

He was speaking at a press conference at the 20th Annual Palm and Lauric Oils Conference and Exhibition 2009: Price Outlook 2009/2010 which ended here.

The CMH infrastructure will be developed as a spot commodity market that uses crude palm oil (CPO) as the underlying commodity to facilitate Islamic financing based on the Murabahah concept.

Yusli said the commodity-based Murabahah transactions would be the first for Malaysia that used CPO-based contracts.

"It has never been done and we are creating it here. We are combining Islamic finance and commodity which are our areas of strength in Malaysia," he said.

According to Yusli, CMH has received good support from palm oil producers who have committed substantial value of crude palm oil to be used as the underlying commodity.

"Palm oil producers will have an avenue to make additional money because they will earn some charges when they supply their palm oil to CMH," he said.

On another development, Yusli said Bursa Malaysia was still in talks with the Chicago Mercantile Exchange (CME), the world's biggest futures exchange, on potential collaborations.

"We cannot disclose anything but I can confirm that discussions are still ongoing," he said.

In December 2007, Bursa Malaysia and CME were in discussions at the preliminary stage as the local stock exchange explored potential collaborations with strategic business partners to assist the growth of its different businesses.